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Pa. Medical Firm Ex-CEO Faces Sentencing For Fraud

By JOE MANDAK

PITTSBURGH (AP) â¿¿ The former chief executive of a western Pennsylvania medical billing and staffing firm faces sentencing Tuesday for securities fraud and tax evasion for a multimillion-dollar penny stock fraud.

Federal prosecutors and defense attorneys disagree greatly about how much time 38-year-old Richard McDonald, of Leechburg, deserves in prison for the scheme that prosecutors contend cost hundreds of World Health Alternatives investors as much as $200 million when the stocks bottomed out following McDonald's resignation in August 2005.

The federal judge must consider guidelines that use a series of numerical scores meant to "weigh" the seriousness of his crimes. Prosecutors have already agreed to let the judge sentence McDonald as though the losses were just $41 million, a number McDonald agreed to when he pleaded guilty to fraud and tax-related charges in April.

Still, prosecutors and McDonald's attorneys vehemently disagree about how much time he deserves in prison and what kind of person he really is, according to presentencing arguments.

Prosecutors contend McDonald was a headstrong wheeler-dealer who siphoned money from the company, manipulated records to hide $2.3 million in unpaid payroll taxes and fudged records overstating loans he made to the company as well as financial statements used to fool auditors and shareholders.

As such, Assistant U.S. Attorney Shawn Sweeney wants McDonald sentenced to at least 15½ years and perhaps as many as 19½ years in prison.

McDonald's attorneys, including former federal prosecutor Tina Miller, argue that the sentencing guidelines are unfair and that McDonald should spend no more than seven years in prison.

Prosecutors contend McDonald's sentencing score should be increased because of the amount of loss, the fact that he endangered the solvency of a publicly traded company and was an officer of the company and because the scheme had more than 10 victims.

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